Lowering Energy Costs at Home this Winter

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Contact them to get out of debt today at ChristianCreditCounselors.org. If you're getting cold feet about heating your home this winter, stay tuned. We have a few energy-saving tips for you.

Hi, I'm Rob West. With winter setting in, many Americans are bracing for higher gas and electricity costs. We'll offer a few cold-weather energy-saving tips for you today. Then it's on to your calls at 800-525-7000. That's 800-525-7000. This is Faith and Finance.

Biblical wisdom for your financial journey. Well, keeping your home warm in the winter is certainly a priority, and there are always ways you can reduce your energy usage and your expenses. Our first suggestion might seem counterintuitive in colder weather, but it has to do with ceiling fans. Most fans have a toggle switch located below the blades, which changes the direction of your fan. In the summer, the fan blades should rotate so the air pushes down. Reverse the direction clockwise during winter months and set fans on a low speed so warm air, which rises, of course, can circulate from the ceiling to the lower levels of the room.

With the fans pushing warm air down from the ceiling, you can lower the thermostat a bit, saving power without sacrificing comfort. Our next tip is about conserving electricity. You may not realize it, but plugging in electronic devices continues to draw electricity even when they're off. That can amount to as much as 10% of your electricity usage every month. The culprits are devices like smart TVs and DVD players, computers, monitors, gaming systems, and printers. The solution to this costly energy drain is to plug the components of your computer and home entertainment systems into power strips. With the single flip of a switch, you can cut off their use of power whenever you're not using them. Another electricity thief is your charger.

Don't leave your device chargers plugged in all the time because they continue to draw electricity even when you're not charging something. There are also a few home maintenance chores that can help cut your energy costs this winter. The first involves air leaks. You don't need to heat the entire neighborhood, so locate and seal any drafty doors and windows. Replace any damaged gaskets and add caulk along the cracks where needed. If your walls feel drafty around light switches and outlet covers on exterior walls, there may be a weak spot in your wall insulation.

Consider installing foam gaskets behind these switches and outlets. Check for proper insulation in attics and crawl spaces. The attic is one of the most important thermal barriers in your home. Ask your energy company how much attic insulation they recommend for your area of the country. Another key home maintenance task is to check your heating and air system filters regularly.

Clogged filters make your system work harder, wasting energy, so clean or replace them every two months. When the heat is on, experts recommend setting the thermostat to 68 degrees. Open the shades or drapes on sun-facing windows during the day to get free solar heat in your home. When the sun goes down, close the shades or drapes for insulation.

Heavy drapes work best for this. If you feel chilly in the house, put on another layer of clothes before turning up the thermostat. Don't block your vents with furniture or other obstructions. And check with your power company for more energy-saving suggestions. They might also offer rebates for installing energy-efficient upgrades in your home. That could include a smart thermostat, electric hybrid water heater, duct ceiling, or even improved attic insulation. Our final tips are as simple as changing light bulbs. Upgrade to LEDs and lights that are used most often.

LEDs are more affordable than ever, last longer, and are more efficient than traditional incandescent bulbs. For outdoor lighting, use photocells, which automatically turn on when it gets dark. Motion sensor lighting is also a great option.

A combined motion sensor and photocell unit is the best of both worlds. This might seem obvious, but don't forget to turn off the lights when you leave a room. Make energy conservation a family challenge. Talk to the kids about being good stewards of our resources and help them get in the habit of turning lights and devices off when they're not being used. Set an example with your commitment to taking care of your home, which is one of your many blessings from the Lord. Well, I hope these tips will help you save some money during the cold weather here during this time where we have inflation sky high.

I know we're all looking for ways to trim the budget. By the way, the FaithFi app could help you get a plan in place to actually track your budget. You can download it today at faithfi.com. That's faithfi.com.

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This is Faith and Finance. I'm Rob West. We're taking your calls today. 800-525-7000. That's 800-525-7000. All right, let's head to Arkansas. James, you're next on the program, sir.

Go ahead. When talking about what you can put in your 401k annually, I assume that my company contributes five or six percent on top of what I do. So the total amount for the year is both yours and your company's contribution, right? Yeah, you're talking about the recommended 10 to 15 percent contribution?

Right. Yeah, so that's just a rule of thumb and yes, I would agree with you when we're calculating how much you're putting aside. I would include both of those together because if you were to follow that and you were to get 10 to 15 percent of your pay, whether a portion that's coming from you and a portion from your employer, and you were to do that over 30 or 40 years or even 20 years, you're going to have quite a nest egg there. All that is, is a rule of thumb.

So we just have to recognize that and take that with a grain of salt. That doesn't replace, got a real meaningful retirement planning where you'd actually sit with a professional, you'd look at, okay, what is my lifestyle now? What do I expect it to be in retirement? How much do I need to be putting away? How much have I already saved? What might we expect that to grow to between now and retirement at a reasonable rate? And will that number actually, alongside Social Security, be enough to cover my lifestyle? And they could tell you whether you're on track ahead or behind.

So I always love that because it's a bit of a deeper dive. But yeah, that 10 to 15 percent rule of thumb is a good one. And in calculating it, I would certainly look at both yours and the employer's contributions. So kind of along that line, I'm 58, looking at retiring in the next five years. I've got a government pension, so that kind of changes my Social Security a little bit. But I always hear people say you've got to have X amount of money in your retirement fund before you retire. When you have a pension, how does that come into play with that?

Because I've been running my, calculating my numbers for what I'm going to need just to sustain. And the pension plus my Social Security, when I decided to draw it, looked like it'd be more than enough. But I don't have, you know, the two or three million dollars in the bank.

Yeah, yeah. Well, but keep in mind, you know, the idea behind the 10 or 12 times your income in the bank and in a 401K or 401K plus the Roth IRA is so you can convert that to an income stream. But you've already got a guaranteed income stream in the form of your government pension. And as long as if you're married, that's going to cover your life plus your wife's if you predecease her, then you, I mean, that's as good as, you know, 10 or 12 times that in the bank because, you know, all we're looking for is an income stream. So if you're telling me that your government pension plus Social Security is more than enough, then really anything you're saving in a 401K is just gravy at this point because you've already shored up your income needs. Okay.

That's what I thought. But I keep hearing all these people talking. It scares me. I sure appreciate your time. Well, you're very welcome, James. We appreciate you listening and being on the program today. May the Lord bless you. To Youngstown, Ohio, Lynn, you'll be our next caller.

Go right ahead. My question is kind of, you know, with charity to some degree, does that start, you know, at home with your family first? Should I consider getting a condo for my brother? He's like 64.

He wasn't very good with money, but he hasn't asked for money for a long time now. So I think he's better. So would that be something for me to ever consider? Yeah.

And so let me just make sure I understand. So you're considering making a gift to him to be able to buy a condo or you would actually buy it and get a mortgage and just pay the mortgage to help him out? What is it you're considering? Well, I would probably just buy it straight out, you know, for him. With cash.

Right. So essentially, what you could do is, I mean, if you wanted to invest in a condo, and let's say you buy a condo that you feel like is a pretty good investment, it doesn't hinder you financially, you want to do it to bless your brother, then as long as you retain the ownership of that, you're on the deed. And then essentially, you're allowing him to live in it. And you know, you could buy, you could get a renter's insurance policy or an insurance policy to cover, you know, any kind of major problems. But essentially, you'd be renting it, if you will, to your brother, or in this case, you'd be gifting it to him because you wouldn't be asking him to pay you for it. And then if at some point he decided to move out, well, then you could sell it and you'd be able to take the appreciation for this property over time. And if you buy it right, you know, you would expect that it would get a modest amount of appreciation. So, you know, I'd probably add in addition to, you know, a homeowner's policy on it, I'd probably get a liability policy at what's called an umbrella policy. You know, they're pretty cheap.

You could get one for a couple of million dollars. And this would just basically cover you if there's anything that happens anywhere, whether you're driving a car and you're in a really bad accident, somebody's injured or somebody slips and falls in, you know, your condo that your brother's living in. This would step in beyond the coverage limits of, let's say, your auto property and casualty policy or your homeowner's policy. So it's just a good thing to have just to protect you against any liability that you might have in any area of your life.

So I, you know, I think there's not really any issue there with regard to liability. I think the question is just, is this something the Lord's leading you to do just as a blessing to your brother? And, you know, the only thing I might consider is, you know, is there some sort of, you know, lifestyle or poor decision making on his part that this could actually accelerate just because he's not having to kind of grow up and manage his finance as well? And, you know, the extent to which you keep stepping in and, quote unquote, helping him, and I appreciate what you're doing and your desire to be of help, just make sure that that's not, you know, getting in the way of him really taking some responsibility for himself. Now, obviously, I know nothing about the situation, and that may not be a factor at all. But I would just prayerfully consider that before you made this decision, because the last thing you'd want to do is get in the way of either him learning to be financially mature and responsible on his own as a steward, or more importantly, what God's doing in his life spiritually.

But if you don't think either of those are a factor, then this could be a great blessing to him. And as long as you have the proper insurance coverages, and this property remains in your name as an asset of yours, then I don't see any problem with it. Is that helpful? It is. It is.

Yeah, yeah, wonderful. Yeah, I don't want him to give it to one of his kids. So that's why I think in this case, you'd want to retain ownership.

If your intent is not to give him the asset, but just create a place for him to live, then I would keep your name on the deed, make it very clear to him that I'm buying this condo, I'm going to allow you to live in my condo, and I'm not going to charge you any rent. But I would put all of that in writing, because the other thing you want to make sure of, especially with family members and money, is there's not unmet expectations because of a lack of clarity. So whatever the plan is, I'd put it in writing, Lynn.

So maybe you'd put it in writing that, you know, I'm buying this condo, this is going to stay in my name, you're allowed to live here, X number of years, I'm going to charge you $0, and I'm going to charge you $2. And everybody signs off on it. And then there's no confusion there for his kids, for you, for your brother. You know, everybody's clear on what you're doing here.

And that's just going to avoid unmet expectations and potentially a damaged relationship. Okay. Yeah. Wonderful. Thank you very much. All right, Lynn, God bless you. We appreciate your call today. We're going to be back with much more just around the corner.

Stay with us. A friend recommended Christian Healthcare Ministries as an option to insurance and CHM helps pay for medical needs while allowing some breathing room in my budget. Open enrollment is here. So make the switch today with potential cost savings up to 40%. Christian Healthcare Ministries at chministries.org slash faith buy. We are grateful for support from sound mind investing in the faith and finance program. For more than 30 years, they've been helping Christians reach their financial goals with step by step guidance for investors at every stage from those just getting started to those getting ready for retirement through scriptural principles and practical suggestions. SMI offers financial wisdom for living. Well, more information, including the short video webinar on profit and peace of mind, no matter what's happening in the market is available at soundmindinvesting.org. Welcome back to faith and finance. I'm your host, Rob West. The number to call is 800-525-7000. I'm looking forward to hearing from you as we take your calls and questions from across the country.

In fact, let's head to Cleveland. Hi, Tom, how can I help you? How you doing, Rob? I've got a question for you today. I've got a $70,000 inheritance that I received. It's an online bank, Ally. I got a $20,000 CD that I put in for 18 months at five and a quarter percent. And I got a portfolio with about $50,000 in a traditional IRA. I've got a mortgage with, I owe about $100,000 on it. It's a BA loan at two and a quarter.

It's a low loan. I refinanced. I don't know if I should put this money towards the house or a meeting with a financial advisor later this week to go in stocks and bonds. But I'm kind of paranoid over it because we've lost so much money the last year in the $50,000 that I already have in a portfolio. I don't have any debt really. Pay my credit cards off.

I've got an emergency fund of about three to six months. I could make it higher now. Yeah, very good.

And no, I appreciate that background. It's really helpful, Tom. What is your age? Sixty-one. I'm working. I have a good job. I got about 2,000 surplus a month that I could invest, you know, ties and whatever with it. Great.

All right. So you've got a couple of thousand a month surplus. Just based on what you're thinking and praying about today, how long do you think you're planning to continue to work? Lord willing, about till I'm 70. I work in the oil field. It's a pretty good job. Yeah, probably about another eight, nine years.

Yeah. So I think the key is, you know, I'd love for you to have that mortgage paid off by the time you retire. And so let's say another decade, you know, one approach would be to say, okay, I'm not going to pay this off right now because I want my investments to continue to grow. I know they've gotten beaten up, but I think you continuing to fund long-term tax-deferred retirement savings is going to be key. Letting that grow over the next decade. I would even try to look at maybe even putting some of the CD money in if you have the option to do so, let's say through a 401k and maybe run an amortization schedule to say, okay, what would it look like to make sure that that mortgage is paid off by the time I retire in the next nine years?

And how much extra would I have to send every month? I wouldn't be in a rush unless you just had a conviction from the Lord to be debt-free because your interest rate is so low. And then I would really focus on these next nine years, putting as much as you can away toward long-term retirement savings.

And with that advisor, do some planning so you know what your goal is so you've got enough to cover your expenses and your lifestyle when you get to retirement. Hope that helps, Tom. Thanks for your call today. Let's head to Illinois. Hi, Keith. Go right ahead.

Yes, thank you. My question involves capital gains on a real estate sale. I heard you talk in the past that a married couple living in the home two of the last five years can get $500,000 and I guess if you're single, you can get $250,000. My particular situation is I'm married but I'm separated. My wife lives in the house and I do not. If we were to sell that home, would I still be entitled to the $500,000 since we're still legally married but not living together?

Yeah, that's a good question. You would have to check with your CPA on that, Keith. It's a little bit of an unusual situation. I mean, the rule is you have to live there two out of the last five years. So it could be that she would be able to get the $250,000 or perhaps you have and you would be able to meet that requirement. Have you lived there two out of the last five years? Not me, she has.

Okay. And how do you own this property? Are you both on the deed? Yes, jointly. I went to a couple tax people.

One of them was actually a CPA and he said he couldn't answer the question without doing a bunch of research which I found surprising. The other one said yes, you would be entitled to it. So I got conflicting answers from two different so-called professional tax people.

Yeah, and unfortunately, I don't have the specifics on that one. Just because you haven't lived there two out of the last five years. So that tells me you haven't met the requirement and therefore wouldn't be entitled to that exclusion. I realized that she is a 50% owner and she would be able to meet that requirement. How much profit do you think you all would have out of the sale? Well, the house is paid for.

There's no mortgage on it. Yeah, the question though is around capital gains which is the selling price minus the original purchase price. Yeah, it would be over the $500,000. So you'd have not the selling price but the gain itself would be over half a million? Yeah, because I'm sort of guesstimating because the house is in California and it's probably worth about $750,000. Okay, and you paid a lot less for it?

Yeah, it was under $100,000 back in 1980 when we bought it. Okay, wow, yeah. So this is a pretty big question that you all need to get answered. So this is the year for you to hire a CPA to prepare your taxes and help you chase this down. It's not going to be a complicated one. I just am not sure exactly how that works given that you're still married filing jointly, correct? No. You're not, but are you legally divorced?

No. Okay, so you're married but you file individually as singles? I don't know how she files.

That's how I file. Okay. Yeah, so you're just going to need to get some professional counsel here, unfortunately. It could be that she's entitled to the $250,000 and you're not.

I just don't know. Unfortunately, I wish I could give you a definitive on it, Keith, but you're going to need to check with a tax professional on this and I'm sorry it hasn't been as easy as you would have thought it should be as you've been trying to get this information. So I think you need to find that person who knows exactly how to handle a situation like this and understand what you're in for. If you did have capital gains on your portion of it, it would likely be 15%. If you're as a single person, if you have income between $44,000 and a half a million in terms of filing as a single person, then it's going to be a 15% capital gains tax.

So that would likely be the most that you would have to pay on the gain, but hopefully you'll get some further help on that just depending on this exclusion and how it's treated. Keith, thanks for your call today. I'm sorry we didn't have a definitive answer for you. We appreciate it, though. Well, once again, our time went by way too fast, but tune in next time and we'll do it all over again. Before we go, I'd like to thank our incredible production team, Amy, Devin, Jim, Robert, Brandy, Rob, and Ben. Couldn't do it without them. Have a great rest of your day and I'll see you again next time for another edition of Faith and Finance. Faith and Finance is provided by Faithfi and listeners like you. Thank you.